Since the second week of November 2023, the price of Chainlink (LINK) has stabilized within a set range; this trend has helped LINK survive the turbulent cryptocurrency market. Chainlink reports gains of more than 7% over the past day, while the majority of cryptocurrencies are still fluctuating.
The price of Chainlink is expected to decline as part of a sound correction.
Since November, the price of Chainlink (LINK) has returned to the $16.86 barrier five times in a row and the $13.08 support four times. If history is any guide, the price action has developed a definite range that suggests a potential correction because these levels are creating peaks and troughs, respectively.
If Chainlink price rejects the $16.86 resistance level, it might lose the support from the 50-day and 100-day Simple Moving Averages (SMA) at $14.87 and $14.43, respectively. The price of LINK might drop to $13.08, or around 20% below present levels, at the bottom of the market range if neither of these levels holds as support.
A catastrophic scenario would see Chainlink pricing break through the previously indicated barrier and challenge the 200-day SMA at $10.772. The 50-day SMA’s southward slope indicates that this is the least resistant path.
Should the decline occur, it might present a chance for later buyers to enter at a lower price for LINKs. The pattern might repeat due to the subsequent purchasing pressure, and Chainlink’s price would probably find support at $13.08.
On-chain indicators point to a potential price adjustment for Chainlink.
A number of on-chain measures from Santiment, starting with the Market Value to Realized Value (MVRV) ratio, which determines the average profit or loss of traders over a given time period, support the gloomy forecast. There is danger surrounding the MVRV. The price of Chainlink has corrected each time the MVRV has crossed above this threshold.
While this is going on, the average return on investment for all LINK holders is currently 10X, suggesting that the demand for profit booking may already be extremely large.
In addition, the supply of LINK on exchanges has increased steadily, rising 2.4% from the lowest point in January 2024 of 151.34 million to the present 155.01 million. Growing numbers of LINK tokens on well-known exchange wallets suggest that short-term selling pressure is intensifying.
The positive exchange flow balance further supports the gloomy assumption. The positive 46,000 indicates that more LINK tokens are entering exchanges than are leaving. This suggests that there may be a sale in mind.
On the other hand, if the bulls strengthen their buying momentum, the Chainlink price may break through the $16.86 barrier and reach the range high at $17.67. A higher high above this point would disprove the bearish theory.